AMT tax is a parallel tax that aims to tax the wealthy taxpayers who have lower regular tax liability due to preferential tax benefits.
To calculate AMT-
· Itemized deductions allowed under the AMT are mortgage interest used to buy, build or improve your home, charitable contributions, casualty losses, medical expenses in excess of 10{eb914d8c00d6b744d02a9a8064b0bfd5c559be7136358887c29ad495da2b8d17} of adjusted gross income (AGI), the deduction for sales and excise taxes on qualified motor vehicle purchases after February 16, 2009, and miscellaneous itemized deductions not subject to the 2{eb914d8c00d6b744d02a9a8064b0bfd5c559be7136358887c29ad495da2b8d17} of AGI floor.
· Personal Exemptions are not allowed but the AMT exemption is allowed.
· AMT Exemption that is allowed for 2009 from the AMTI income:
o Married Filing Jointly and Qualifying Widow(er): $70,950
o Single and Head of Household: $46,700
o Married Filing Separately: $35,475
· As with every exemptions there is phase-out rules for the AMT exemption. The phase-out range is based upon alternative minimum taxable income (AMTI). The AMTI phase-out ranges for 2009 are as follows:
o Married Filing Jointly and Qualifying Widow(er): $150,000 to $433,800
o Single and Head of Household: $112,500 to $299,300
o Married Filing Separately: $75,000 to $216,900
· Tentative AMT is calculated as 26{eb914d8c00d6b744d02a9a8064b0bfd5c559be7136358887c29ad495da2b8d17} of the AMTI upto $175,000 and 28{eb914d8c00d6b744d02a9a8064b0bfd5c559be7136358887c29ad495da2b8d17} on the balance.
· If the Tentative AMT is greater than the Regular tax liability than the difference is the AMT tax liability.
